Activity: Preparing a 1040 Income Tax Form

Activity: Preparing a 1040 Income Tax Form

April 15 is known in the United States as Tax Day — the deadline for individual tax returns to be submitted to the federal government. As soon as your child is old enough to earn an allowance, he or she is old enough to begin to understand taxes. While it is true that based on their circumstances most students will not be required to file an income tax form, eventually they will earn their first paycheck, money will be withheld, and they will likely need to file a form to receive their wages. Now is a great time to help our students understand why we pay income tax, what withholdings are, and how to prepare a simple 1040 income tax form.

Learning about taxes starts with how much it really costs for your child to make a purchase. Remember his chagrin when he found out that that item in his hand at the store would cost more than the sticker price? Beginning to learn about taxes usually starts with sales tax. In the same way, that money that he will eventually earn will not all go to him. He will need to pay Social Security tax, federal income tax, and state income tax.

Brief History of Federal Income Tax

Congress passed the Revenue Act in 1861 during the Civil War, taxing personal income to help pay for the war. After the war, the tax was repealed and replaced with a flat tax. Because the flat tax was not representative of the states’ populations, the Supreme Court declared this tax unconstitutional. Congress then passed and ratified the 16th amendment, which taxed the personal income of individuals.

What is a Federal Income Tax?

In short, an income tax is a tax imposed by the federal government requiring individuals and corporations to pay a portion of their income received. These taxes help pay for the services the federal government provides. Since we have a progressive tax system the percentage paid by an individual can vary from 10%–40% of his total income depending on the tax bracket or the amount of money made.

 

Suggestions

Resources for these suggestions can be found below.

  • First, have your child understand the conditions under which he would be required to file his taxes.
  • Next, print out this pay stub example and the corresponding student questionnaire. Have the student fill out the questionnaire to understand where the money he makes is going.
  • Download the 1040EZ form with instructions (see resources below).
  • Use these tools from Classroom Tools: Use this sample completed W-2 to have your child fill out his 1040EZ form. Check to see if he did it correctly with the completed 1040EZ.

 

Additional Resources

Tax History Museum
Timeline of important events in tax history (use the timeline at the top to navigate to other eras).

Tax Brackets
Helpful for understanding the percentage of income paid. (You may want to use this free ad blocker before visiting.)

Tax Tables
Or just look it up the old-fashioned way.

1913 Form 1040
Take a look at the first income tax form.

1040EZ Instructions
Great place to start in understanding how to file your taxes.

1040EZ Form
Blank form for practice in filling out.

1040EZ
Sample form already filled out.

Your W-2 Form
Infographic showing the meanings of the various fields.

How to Fill out a US 1040EZ Tax Return
Step-by-step instructions.

How to File Your Child’s First Income Tax Return
Guidelines from Investopedia for when to begin filing.

 

Activities

You Decide
Interactive where you get to decide how the government spends the money allotted for services.

A Line-by-Line Walk Through the 1040
Interactive from The New York Times that analyzes each line of the form.

 

Unit Studies & Lesson Plans

The Hows of Taxes
Dozens of lessons for teachers from the IRS.